The British government privatised all the UK water companies some years ago. It turned out just about as well as you would expect. Turns out its much cheaper to pump shit into the rivers and risk the occasional paltry fine than to invest in infrastructure. Meanwhile you can load the water company with debt and pay massive dividends to the private equity companies and foreign investors that own the companies. And consumers have no choice, because each company is a monopoly. Marvellous.
The privatization of infrastructure is basically theft. Take from the public, and gift to private corporations that the public has no power over. The privatization of the public's air or water supply should be criminal.
> The privatization of the public's air or water supply should be criminal.
Internet, cellphone, electricity, trash, healthcare, insurance... if the vast majority needs the same thing, the local, state, or federal government should provide it. We need to put an end to all the rent seeking behavior, it's parasitic and slowly destroying our economy.
Don't forget roads and mail delivery. And there are people who look at that public infrastructure that basically allowed civilization to develop, and they go "what a shame, someone could be collecting rent on that".
> if the vast majority needs the same thing
It's more that if you privatize certain necessary infrastructure, the owners either end up as monopolies and/or require heavy regulation, which means the customer can't just buy from someone else and/or new companies can't unseat dysfunctional incumbents.
The government doesn’t need to provide it. There should be type of company for utilities that are basically non-profits for providing the service. Government owned makes sense for most. But could also have co-op where the customers own the company, or charity.
Also, the utility doesn’t have to provide everything. MVNO, which are cellular providers on top of other provider, could work with mobile provider utility. Internet is the other ones where in some countries multiple providers sit on top of phone company.
In the US, public companies are traded on stock exchange. There are state-owned corporations. The federally owned ones are a mix of semi-independent like Amtrak and USPS, and ones that should be governement agencies. Municpally owned corporations tend to be independent but are owned by states or cities. Municipal utilities are pretty common but work best for small ones like water.
The US has whole categories of 503c non-profit organizations, with 503c3 tax-exempt charities the most well known. I can't tell if there category for non-profit utilities. I think there should be room for companies between government-owned and for-profit, companies that do a service without making money.
I'm pretty sure you can still pay someone to pick up and dispose of your trash regardless of any public trash disposal service regime.
Like how you can hire private bodyguards, and not leave your safety to the police.
Or course your trash stopping being "picked up reliably" and the presence of alternative private services are often not independent events (either the government/local government decides to not put in the effort and leave it to the public to pay for third party services, or they're actively encouraged to do so with under the table bribes).
You can have "premium" services for-profit over and above base-level services. In countries where the government provides healthcare, you can pay for amenities like a private hospital room. Or if the government is too slow with mail delivery, you can pay a courier to overnight it. and so on.
Yep. Not saying public service is efficient, the privatisation of certain sectors like water and is much worse. The environment cost is just ignored and the public still get to foot the bill
Monopolies are desirable (unavoidable?) in some cases. I don't want 35 competing toll roads running past my house. Natural monopolies, goods and services that will never be profitable (or would just never be as profitable as refusing to provide them would), and essential services are ideal for public monopolies. I'm not sure there's ever a situation where a private monopoly is the ideal though.
The best way to evaluate it would be as a function of the elasticity of the service provided.
I can avoid eating a pizza but not avoid taking a specific road. Besides it seems like any domain where the initial investment is large seems to be places where one monopoly eventually emerge.
At least in my opinion healthcare (hospitals and such not including drug development) should not be private or of there is there should be a strong public hospital network for providing care
The UK government privatised water companies in England. In Scotland the water remained nationalised.
In recent years, the UK government started measuring water quality, by installing measurement devices absolutely everywhere in England. The measurement devices then show that the rivers have lots of shit in them. But the point is, the shit is not a new development - they always had shit.
Meanwhile in Scotland, the rivers are not monitored, there's a pathetically small quantity of measurement devices installed. Hence there's no scandal in Scotland because ignorance is bliss I suppose, not because nationalised water is somehow amazingly better.
Somehow people with a narrative to push turn this into a tale of how privatisation is terrible despite there being no evidence to back this up whatsoever.
The amount of monitoring, or even the amount of shit in the water aren't a good measure of how well privatization has served the public interest, at least not without context.
Monitoring is a good thing to have, and clean water is a good thing to have. Those are valid metrics, but what also must be considered are the costs of providing those services, how available/accessible the services are to the public, the price the public pays for them, etc.
I'd love to see an in depth analysis the impacts of privatization in the UK, but I'd be surprised if the public was better off because of it.
In the end, privatization tends to be the worst option because of one simple fact: in addition to total compensation of all the costs required to provide the service to the public, the private entity also demands that they make a profit on top of that.
A government can provide a service without any pressure to charge anything more than needed to keep the system going. Governments can even run essential services at a loss if needed. The government, unconcerned with personal enrichment, only has to worry about providing the best service to everyone.
The private corporation only cares about profits and the endless growth of those profits so they will do anything to enrich themselves even at the expense of the public.
Government is incentivized to provide what the public wants because when it fails they risk being voted out of office. Corporations are incentivized to provide as little as possible, spending as little as possible to provide it, while charging the public as much as possible and they are not accountable to the public at all.
> privatization tends to be the worst option because of one simple fact: in addition to total compensation of all the costs required to provide the service to the public, the private entity also demands that they make a profit on top of that
This applies to all private efforts. Yet history shows the private sector can compete with public initiatives. The difference is competition. Water utilities don't have competition. They're born into a mode of market failure. For natural monopolies, public management seems to work best.
You're right. Competition changes the math substantially. It means the pubic can get tailored services that suit their unique needs and a large number of companies trying to one-up each other fuels innovation.
The public is unlikely to be better off when the service being provided doesn't really allow for competition and utilities and infrastructure are great examples of that. For products and services where competition is desirable, easy, and plentiful I want those options and the government's role should be limited to regulating where necessary to ensure that competition stays strong and the public is protected.
> For natural monopolies, public management seems to work best.
What makes you think so? If the government can't incentivize a private company with a natural monopoly so that it provides an effective service, why would it inherently be easier for it to incentivize public employees to provide an effective service?
It's not like it's immediately obvious from superficial inspection either, it seems to me like there are relative success cases and failure cases of both publicly and privately run natural monopolies. For example, taking rail transport: the UK has privatized it trains and the result is lack-luster, France has a state run railway company which seems to do a pretty good job, and Japan has at least notionally privatized it's railways and provides famously world-class rail service).
JetSetWilly wrote that they privatized England water and it's measurably shit. They didn't privatize Scotland water and they have not enough measurements to say it's shit or not. It doesn't prove either way so the point is moot.
